Xero CFO reunites software giant's brain trust

Sankar Narayan: back in familiar territory

Helping to lead growing cloud software business Xero has confirmed Sankar Narayan’s enthusiasm for fast-changing businesses.

Sankar Narayan FCPA believes good leadership begins with an ability to adapt to change.

“Complacency is the worst thing in leadership,” he says. “The good leaders I have observed are not satisfied with where things are at; they are attuned to change and adapt to it.” 

Change has been a common theme throughout Narayan’s diverse career, which has included chief financial officer roles at Virgin Australia, Astro All Asia Networks and Fairfax Media. 

Now, as CFO at financial software firm Xero, he finds himself again immersed in transformation. The star New Zealand start-up, which posted 77 per cent revenue growth last year, is growing fast and changing as it goes. At the same time, it is transforming the way small businesses operate through its cloud-based accounting products – “tools which at one time were only accessed by much bigger businesses”.

“The good leaders ... are not satisfied with where things are at; they are attuned to change and adapt to it.”

Narayan sees Xero as a technology company, rather than an accounting company, and in joining the business last year he found himself in familiar territory. His first degree was in engineering, and he spent eight years in Silicon Valley as a computer engineer. When he arrived at Virgin Australia, CEO John Borghetti touted the new hire’s information technology background as important to the company. 

“One of the keys to my approach to being CFO is to understand it’s more than just looking after the balance sheet,” he says.

“My engineering background gave me that perspective about operations, and I keep some of that approach with me in the way I do things.”

Narayan believes that one of the main challenges for management in high-growth environments is to ride “the pace of change” within the organisation itself and make sure that it aligns with the nature of the growth.

“What works well today often needs to be re-invented again tomorrow, because what worked well last year might not work well next year in terms of structure,” he says. 

“I try to look forward as much as I can, because history is not a reliable indicator of future profits, and it’s an approach which I hope keeps me agile and nimble.”

Narayan describes Xero’s mission as being to drive the uptake of cloud-based technology around the world.

“The nature of the cloud allows us to be a global business, just as it gives the same opportunity to our customers,” he says.

“The chance to work with a company that is building a global footprint was a major attraction for me when I was asked to join Xero, so this is a very exciting space to be in.”

The history of respect

Sankar Narayan’s appointment as CFO of Xero reunites three business leaders. Xero founder Rod Drury has known Narayan for many years and counts him as one of his mentors. Narayan was able to impart much-valued advice to Drury in the early days of the software company. 

In 2012, the pair found themselves on different sides of a transaction. Narayan was CFO at Fairfax when the Australian media company paid NZ$750 million for New Zealand-based online auction house Trade Me, of which Drury was a director. Trade Me founder Sam Morgan is now a director at Xero.When the position of CFO at Xero came up, Narayan says “it was an easy decision to make”.

Not only did it offer the opportunity to work with Drury and Morgan, but it allowed him to revert to an earlier passion – software engineering.

Read next: The last software chief in Australia's cloud accounting fray


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